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Delphi Digital has recently published a sixty-five-page report, titled ‘Entering the Ethereum.‘ The articles have made a prospective analysis of the state of the Ethereum Network post its POS update. Ethereum which recently successfully conducted the Constantinople hard fork on Ethereum has many updates outlined for the next two years.

The last update outlined on the road map is Serenity, which would finally implement Proof of Stake (PoS) and sharding on Ethereum. A few contradictory points from the report caught the attention of Vitalik Buterin, the co-founder of Ethereum.

Vitalik Finds Flaws in the Report, Not in Ethereum-

He raised the first point of contradiction about the concerns regarding rewards of staking on PoS. According to the report, at $100 per ETH, a stakeholder with 32 ETH would incur a loss of 26% annually. However, Vitalik claimed that the research had not accounted for the proportionality between the transaction cost and the price of Ethereum.

That seems very unlikely to be true. That implies that 1m ETH/year rewards cannot pay for a few hundred times the ethereum's current blockchain load times a ~256 overhead factor. The latter cost is comparable to the operation of the current chain…

Vitalik also explanied the fact that “if the cost to process one shard exceeds staking rewards from 32 eth, then that means transaction fees need to go up and/or shard count needs to go down.”

Theoretically, the tx cost of a shared chain ultimately only needs to be the cost of downloading and verifying it ~1000 times, which is actually not that high. Anything that can't afford that should definitely be L2.

Final Implications of the Report and Vitalik’s Message About Price

Nevertheless, after a complete analysis of Ethereum and its future plans, the report by Delphi Digital outlines some interesting conclusions. Firstly, it claims that Bitcoin might still be the number one cryptocurrency in terms of price as it is a better Store of Value.

“Bitcoin has stronger characteristics for being perceived as a Store of Value in the long run, however, we believe Ethereum can make some changes to better position itself as one.”

Finally, about the shift from PoW to PoS, the report concluded by saying that the risks with PoS can be mitigated and the updates can be made successful.

“There is risk in the transition from PoW to PoS, and PoS has a shorter history to evaluate. However, we believe the change could be a net benefit for Ethereum. Since we have refuted the previous arguments why ETH can not accrue value, this is a benefit for the network’s security under PoS.”

I personally am definitely uncomfortable making a “moon or bust” shot because there are plenty of possible future worlds where ETH is the #1 cryptocurrency at a price of $100 and we need to survive there too and provide the value that people expect blockchains to provide.

As a programming prodigy himself, the Canadian-Russian cryptographer abstained from making any comments on the price of Ethereum. He only seems to be concerned about the development and brand of Ethereum in one of the most robust emerging markets; the Blockchain Industry.